Or maybe a bit of both?
We looked to be having lift off after knocking out whatever barriers, DNT’s and stops were lurking at 1.70 but the lack of follow through has sent us down to 1.6963 now.
This move lower may encourage shorts to put on another defence of the level but the bulls may not be out of the game just yet.
EUR/GBP may have had a big say in the move back as it hit a fairly strong tech level on the button at 0.7960.
EUR/GBP weekly chart 16 06 2014
We dipped to 0.7750 back in July 2012 and were flanked by the cross finding support around 0.7940/60 area, so it’s a fairly strong level in its own right. Bids down here coincide with the tech and they look to have been strong enough to exhaust the GBP/USD run through 1.70.
The force is still with the pound buyers as rate hike expectations and safe haven buying keep a bid tone in place. If the 0.7960 level holds strong in EUR/GBP then cable may have to work hard again to take the big figure. If it does a lot of focus is still on the 1.7042 level.
GBP/USD weekly chart 16 06 2014
